VC Firms Win Big In New Regulation

It looks like VC firms have done a successful job of convincing politicians that they pose no systemic risk, and that adding to their regulatory burden would a drag on innovation. A proposal from Congressman Paul Kanjorski would specifically exempt VC firms from new regulations, though first it requests that the SEC define "VC," which can be nebulous (e.g. if you investin in a PIPE, are you still a VC?).

We've argued that the upside of creating this exemption is doubtful. We're sympathetic to the idea that we don't want to impinge on innovation, but we're likely to create distortions and a system which can be gamed.